Microsoft Corp. Wednesday formed a new streaming media division that will develop and market solutions for both consumers and businesses based on Windows Media Technologies.

The software giant also announced it was joining the Internet2 Coalition as a corporate partner and plans to provide more than $1 million in financial and technology investments to the next-generation Internet project.

Microsoft said the streaming media unit's formation recognizes the increasing popularity of streaming audio and video. The new organization will help businesses use streaming technology in new applications. The company plans to increase the level of streaming media support in future updates to Windows 98 as well as in Windows 2000 and other operating system releases.

"As end-user behavior shifts to encompass these new technologies, vendors are challenged to provide consumers and knowledge workers with a superior digital media experience while enabling business managers and content providers to develop profitable business models and extend their reach into new markets," the company said in a statement.

Speaking on the company's plans to help the Internet 2 Coalition, Rick Rashid, vice president of Microsoft Research, said the project is in line with Microsoft's vision of a network that is accessible at any time from any location.

"The Internet as we know it today is constantly pushed to its limits. Even though now we can participate in videoconferences or exchange audio and video clips with one another, the quality of the experience is not optimal or compelling enough to make it commonplace. By working with the Internet2 consortium, Microsoft is confident that together we can overcome the current technical challenges by developing the new network technologies that will eventually revolutionize the Internet experience," he said.

Doug Van Houweling, president and chief executive officer of the University Corp. for Advanced Internet Development, which is leading the next generation Internet project, said the group looks forward to working with Microsoft.

"This relationship not only demonstrates Microsoft's continuing commitment to (research and development) but a willingness to be actively involved with the Internet2 university community in pursuit of our common goals to advance the global Internet," he said.

Microsoft will establish a connection to the Internet2 backbone network, dubbed Abilene, and will connect to other Internet2 research institutions.